Defence technology company Anduril Industries has raised $1.5 billion in venture capital funding, bringing its valuation to $14 billion. Many of these funds will be used to establish autonomous weapon manufacturing facilities.
Why It Matters: Major investors believe Anduril has successfully navigated the complexities of securing government contracts just seven years after its inception.
Sands Capital and Founders Fund co-led the Series F funding round, with the valuation representing a 65% premium compared to Anduril’s last raise in late 2022. Other notable investors include BlackRock, Baillie Gifford, Counterpoint Global (Morgan Stanley), Fidelity, and Franklin Venture Partners, which typically invest in private companies expected to go public soon.
Catch Up Quick: Anduril previously faced challenges in proving its capability to fulfill orders on time and within budget. However, it built a strong business development team and secured significant contracts, including one with the U.S. Air Force for collaborative combat aircraft.
What They're Saying: "There hasn't been a substantial new U.S. defence business in over 50 years," said Marina Serenbetz, a partner with Sands Capital. She emphasized the need for creativity and hard work to earn a place in the defence industry. Serenbetz also mentioned that Anduril’s growth during the Biden-Harris administration alleviated concerns about CEO Palmer Luckey's political views impacting future business.
Look Ahead: Anduril is scouting U.S. locations for a massive factory, Arsenal-1, which will be at least 5 million square feet and employ thousands. It aims to produce tens of thousands of autonomous vehicles and weapons. This facility will join others, including one in Rhode Island for underwater drones and another in Mississippi for solid rocket motors.
Between the Lines: Pentagon officials and analysts have been concerned about the defence industry’s production capacity, particularly highlighted by stockpile depletion due to conflicts like the war in Ukraine. A recent bipartisan report stressed that a "World War II–style industrial mobilization" is currently unfeasible in the U.S.
The Bottom Line: "America and our allies don't have enough stuff," said Anduril’s Chief Strategy Officer Chris Brose, highlighting the chronic shortages in vehicles, platforms, and weapons.